Abstract
We construct a two-period general equilibrium model to evaluate policies affecting agricultural migration and exports. The model is applied to Mexico for the period 1986–1987 to obtain certain qualitative policy conclusions related to the ‘Dutch disease’ brought about by oil price increases. Dutch disease phenomena can be brought about both as the result of real exchange rate changes as well as price changes caused by migration out of agriculture. In the short run it may be possible to use fiscal policy, such as value-added subsidies to agriculture, to at least partially negate the effects of an oil price increase on agricultural exports. (JEL F31, F41).
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